WISER Event on Millennials ‘ Retirement
Women’s Institute for a Secure Retirement (WISER)
“The Millennial Perspective: An Intergenerational Discussion on Retirement Solutions”
Tuesday, June 28, 2016
Key Topics & Takeaways
- 401(k) Trends: Wells Fargo’s Joe Ready highlighted that while Millennials have the highest increase in plan participation over the last five years, but “they are not saving as much because of competing priorities like student debt.” Ready recognized the key drivers to help increase participation in order of effectiveness as: 1) automatic enrollment; 2) total match; 3) match cap; 4) automatic increase; and 5) managed product offered.
- Student Debt: Prudential’s Jim Mahaney explained that in 2015, “71 percent of students graduated with student debt thus delaying contributions to retirement savings.”
- Spending Culture: The Honorable Phyllis Borzi, Assistant Secretary of the U.S. Department of Labor-EBSA affirmed that the biggest challenge in the retirement space is Millennials and encouraging them to save.
Moderators
- Sarah Holden, ICI
- The Honorable Phyllis Borzi, Assistant Secretary, U.S. Department of Labor-EBSA
- Mark Iwry, Senior Advisor to the Secretary, U.S. Treasury
Panelists
- Joe Ready, Wells Fargo
- Jim Mahaney, Prudential Financial
- Spencer Pringle, Retirement Clearinghouse
- Jerrid Burdue, Michigan Technological University
Panel I: Setting the Stage on Millennials’ Retirement
In her opening statement, ICI’s Sarah Holden commented on the current status of Millennials and their retirement savings. Holden noted that Millennials are the “largest and most diverse age group shaped by technology.” She added that Millennials have invested in human capital more than any generation.
Joe Ready, Executive Vice President and Director of Wells Fargo Institutional Retirement and Trust, presented on the retirement plans perspective and 401(k) trends. Ready stated three factors that will influence rapid innovation and change in retirement plans: 1) national policy; 2) regulatory environment; and 3) technology. He highlighted that while Millennials have the highest increase in plan participation over the last five years, but “they are not saving as much because of competing priorities like student debt.” Ready recognized the key drivers to help increase participation in order of effectiveness as: 1) automatic enrollment; 2) total match; 3) match cap; 4) automatic increase; and 5) managed product offered.
Jim Mahaney, Strategic Initiatives Vice President of Prudential, focused on the weight of student debt on Millennials. Mahaney stated that in 2015, “71 percent of students graduated with student debt thus delaying contributions to retirement savings.” He concluded that, “For every dollar that would have gone toward retirement savings if not for student debt obligations, households lose the value of that dollar and the investment growth that dollar would have experienced over time. The impact is much more severe when foregone retirement savings also means missing out on employer matching contributions.”
Spencer Pringle of Retirement Clearinghouse commented on cash-outs and the difficulties in plan roll-overs. Pringle stated that 29 percent of plan participants are leaving balances behind because they are unsure of how to move them. He noted that when surveyed, the roll in process from beginning to end took 27 percent of Millennials two months to transfer their balances. Pringle stated his belief that the industry can promote and facilitate roll in services as an employee benefit to optimize participant retirement readiness and consider paying for roll in service as a permissible plan expense.
Panel II: iOme Challenge Winner from Michigan Tech University
In her opening statement, Phyllis Borzi stated that the United States is “hardly alone” in the global retirement crisis. Borzi applauded the financial services industry on their efforts to promote financial literacy and retirement savings. She added that the biggest challenge in the retirement space is Millennials and encouraging them to save. Borzi then turned to Jerrid Burdue, iOme Challenge winner from Michigan Tech University in hope of hearing what can be done to aid Millenials.
Burdue stated that “to assist Millennials and subsequent generations save for retirement, it is essential for the U.S. federal government to adopt several policies related to: education requirements, the myRA program, Social Security tax, and the Saver’s Credit.”
Treasury’s Mark Iwry emphasized on automatic enrollment and finding a way to auto enroll employees who are not traditionally covered. Iwry commended State Street’s efforts to urge Congress to enact a national framework that ensures workplace coverage for all private-sector working Americans.
Panel III: Congressional Panel, Legislative & Regulatory Action
A panel of participants from Capitol Hill staff discussed current policy problems and innovative initiatives in the retirement and savings space. Panelists included: Michael Kreps from Groom Law Group, Preston Rutledge from the Senate Finance Committee, Kendra Isaacson from Senate HELP, Mike Berman from Rep. Jared Polis (D-Co.), and Aharon Friedman from House Ways and Means.
For more information on this event, please click here
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Women’s Institute for a Secure Retirement (WISER)
“The Millennial Perspective: An Intergenerational Discussion on Retirement Solutions”
Tuesday, June 28, 2016
Key Topics & Takeaways
- 401(k) Trends: Wells Fargo’s Joe Ready highlighted that while Millennials have the highest increase in plan participation over the last five years, but “they are not saving as much because of competing priorities like student debt.” Ready recognized the key drivers to help increase participation in order of effectiveness as: 1) automatic enrollment; 2) total match; 3) match cap; 4) automatic increase; and 5) managed product offered.
- Student Debt: Prudential’s Jim Mahaney explained that in 2015, “71 percent of students graduated with student debt thus delaying contributions to retirement savings.”
- Spending Culture: The Honorable Phyllis Borzi, Assistant Secretary of the U.S. Department of Labor-EBSA affirmed that the biggest challenge in the retirement space is Millennials and encouraging them to save.
Moderators
- Sarah Holden, ICI
- The Honorable Phyllis Borzi, Assistant Secretary, U.S. Department of Labor-EBSA
- Mark Iwry, Senior Advisor to the Secretary, U.S. Treasury
Panelists
- Joe Ready, Wells Fargo
- Jim Mahaney, Prudential Financial
- Spencer Pringle, Retirement Clearinghouse
- Jerrid Burdue, Michigan Technological University
Panel I: Setting the Stage on Millennials’ Retirement
In her opening statement, ICI’s Sarah Holden commented on the current status of Millennials and their retirement savings. Holden noted that Millennials are the “largest and most diverse age group shaped by technology.” She added that Millennials have invested in human capital more than any generation.
Joe Ready, Executive Vice President and Director of Wells Fargo Institutional Retirement and Trust, presented on the retirement plans perspective and 401(k) trends. Ready stated three factors that will influence rapid innovation and change in retirement plans: 1) national policy; 2) regulatory environment; and 3) technology. He highlighted that while Millennials have the highest increase in plan participation over the last five years, but “they are not saving as much because of competing priorities like student debt.” Ready recognized the key drivers to help increase participation in order of effectiveness as: 1) automatic enrollment; 2) total match; 3) match cap; 4) automatic increase; and 5) managed product offered.
Jim Mahaney, Strategic Initiatives Vice President of Prudential, focused on the weight of student debt on Millennials. Mahaney stated that in 2015, “71 percent of students graduated with student debt thus delaying contributions to retirement savings.” He concluded that, “For every dollar that would have gone toward retirement savings if not for student debt obligations, households lose the value of that dollar and the investment growth that dollar would have experienced over time. The impact is much more severe when foregone retirement savings also means missing out on employer matching contributions.”
Spencer Pringle of Retirement Clearinghouse commented on cash-outs and the difficulties in plan roll-overs. Pringle stated that 29 percent of plan participants are leaving balances behind because they are unsure of how to move them. He noted that when surveyed, the roll in process from beginning to end took 27 percent of Millennials two months to transfer their balances. Pringle stated his belief that the industry can promote and facilitate roll in services as an employee benefit to optimize participant retirement readiness and consider paying for roll in service as a permissible plan expense.
Panel II: iOme Challenge Winner from Michigan Tech University
In her opening statement, Phyllis Borzi stated that the United States is “hardly alone” in the global retirement crisis. Borzi applauded the financial services industry on their efforts to promote financial literacy and retirement savings. She added that the biggest challenge in the retirement space is Millennials and encouraging them to save. Borzi then turned to Jerrid Burdue, iOme Challenge winner from Michigan Tech University in hope of hearing what can be done to aid Millenials.
Burdue stated that “to assist Millennials and subsequent generations save for retirement, it is essential for the U.S. federal government to adopt several policies related to: education requirements, the myRA program, Social Security tax, and the Saver’s Credit.”
Treasury’s Mark Iwry emphasized on automatic enrollment and finding a way to auto enroll employees who are not traditionally covered. Iwry commended State Street’s efforts to urge Congress to enact a national framework that ensures workplace coverage for all private-sector working Americans.
Panel III: Congressional Panel, Legislative & Regulatory Action
A panel of participants from Capitol Hill staff discussed current policy problems and innovative initiatives in the retirement and savings space. Panelists included: Michael Kreps from Groom Law Group, Preston Rutledge from the Senate Finance Committee, Kendra Isaacson from Senate HELP, Mike Berman from Rep. Jared Polis (D-Co.), and Aharon Friedman from House Ways and Means.
For more information on this event, please click here